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When the Affordable Care Act was being debated in Congress, former House Speaker Nancy Pelosi infamously insisted that “we have to pass the bill to find out what’s in it.” It turns out, however, that the Obama administration—which has been making it up as it goes along with regard to ACA enforcement—doesn’t care “what’s in it.”

The IRS in particular has been implementing Obamacare as it thinks the law should be, not as it is. The ACA encourages states to establish health insurance exchanges by offering people who get their health coverage “through an Exchange established by the State” a tax credit—a subsidy to help them pay their premium. In the event a state declines to establish an exchange, Section 1321 further empowers the Department of Health and Human Services to establish federal exchange in states that decline to establish their own exchanges (without providing for the premium subsidy).

When, contrary to the expectations of the law’s achitects, 34 states declined to establish an exchange—two more have since failed—the IRS decided that those getting their insurance on federally established exchanges should qualify for tax credits regardless of the statutory text. In conflict with the U.S. Court of Appeals for the D.C. Circuit in a similar case called Halbig v. Burwell, the Fourth Circuit in King v. Burwell found the legal text to be ambiguous and thus deferred to the IRS interpretation.

The so-called Chevron doctrine counsels that statutory text controls when Congress has spoken clearly on an issue. But where Congress is ambiguous or silent, the agency can fill the regulatory gap with its own rules and policies. The problem here is that the ACA’s text was not ambiguous and there is no evidence that Congress intended to delegate to the IRS the power to determine whether billions of taxpayer dollars should annually be dispersed to those purchasing health care coverage on federal exchanges. That the Fourth Circuit has bent over backwards to accommodate the administration’s latest Obamacare “fix shows that it, too, is not so concerned with “what’s in” the law.

To that end, Cato joined four other organizations to support the plaintiffs’ petition for review by the Supreme Court. Our brief argues that the Court should hear the case because it offers the opportunity to reverse potentially grave harm to the separation of powers, to correct a misapplication of the Chevron doctrine, and to restore the idea that drastically altering the operation of a major legislative act belongs to the political process and not in a back rooms of an administrative agency. Just because those who voted for the ACA didn’t care what it said doesn’t mean that the executive and judicial branches should also turn a blind eye.

To see the legal machinations now at play in these cases regarding the Obamacare-IRS-tax-credit, see my recent op-ed in the National Law Journal. Since that was published this past Monday, the government received a 30-day extension in which it has to file its response to the King cert petition. That means that the Supreme Court will be considering at some point next month whether to take the case.

For Cato’s previous briefs in Halbig and King, respectively, see here and here.

Yale law professor Linda Greenhouse is a former New York Times Supreme Court correspondent and now writes a legal column for the Times. Today, she writes about Halbig v. Burwell. For my latest on Halbig and similar cases, see here. Now Greenhouse, who argues these cases are just about gutting the Patient Protection and Affordable Care Act:

To be clear, I’m not suggesting that there is anything wrong with turning to the courts to achieve what politics won’t deliver; we all know that litigation is politics by other means. (Think school desegregation. Think reproductive rights. Think, perhaps, same-sex marriage.) Nor is the creativity and determination of the Affordable Care Act’s opponents any great revelation — not after they came within a hairsbreadth of getting the law’s individual mandate thrown out on a constitutional theory that would have been laughed out of court not too many years ago.

Boy, are they ever determined.

I accept the compliment, with one proviso. The stakes in the Halbig cases are much bigger than the PPACA. The IRS is subjecting those plaintiffs to taxes from which, as Greenhouse implicitly admits, the operative language of the statute would exempt them. The plaintiffs have a right not to be taxed unless Congress expressly grants the IRS that power. A federal judge whom Greenhouse respects (Thomas Griffith) surveyed the IRS’s rationales for subjecting tens of millions of Americans to those taxes, found those rationales to be meritless, and essentially ruled that the IRS is violating the law on a massive scale. If preventing the executive branch from exceeding its lawful powers is just “politics by other means,” then so are the habeas corpus cases Greenhouse approvingly cites.

Unfortunately, when Greenhouse takes the government’s side in Halbig, it seems to be on the basis that, “Of course there are ambiguities and inconsistencies in a 900-page bill that never went to a conference committee for a final stitching together of its many provisions.” That probably is true, but it does not follow that the statute is ambiguous or inconsistent with regard to the question presented in Halbig. The government certainly has asserted such ambiguities and inconsistencies exist. Yet a closer look at the government’s arguments shows that the specific provisions it cites are all quite consistent with the language authorizing subsidies only to those who buy coverage “through an Exchange established by the State.”

Greenhouse also commits an error as well as her own inconsistency. She claims the phrase “through an Exchange established by the State” appears only once in the subsidy-eligibility rules. In fact, it appears explicity twice: one mention appeared in the first draft of those rules; Senate Democrats added the second just before final Senate passage (which all by itself suggests they knew exactly what they were doing). Moreover, that phrase appears seven more times by cross-reference. And the subsidy-eligibility rules do not use any other language – at all – to describe the Exchanges through which the law authorizes subsidies. All of which evince a clear meaning and purpose: to offer subsidies only in states that comply with Congress’ desire that they should establish Exchanges.

Greenhouse’s inconsistency occurs when she (incorrectly) claims, “the two [Halbig] judges trained a laser focus on a single section, indeed on a single word, in the massive statute…ignor[ing] the broader context, in which Congress clearly intended to make insurance affordable[.]” The habeas corpus cases with which Greenhouse apparently agrees also focused on a single phrase – one could argue, a single word – in the Constitution. Would she criticize those cases for failing to uphold the overarching purpose of the Constitution – which appears right there in the preamble – to “insure domestic Tranquillity” and “provide for the common defense”?

I wrote Greenhouse to thank her for her column, which was far more respectful and gracious than many Halbig critics have been. I thought it might be fruitful to offer to debate these cases with her. She respectfully declined, but noted there is a movement afoot to bring my coauthor Jonathan Adler to New Haven for that purpose. Watch this space for development.

Update: I neglected to mention, because I failed to notice, another error in Greenhouse’s oped. She refers to the “failed Commerce Clause” attack on the PPACA brought under NFIB v. Sebelius. As constitutional-law aficionados and health-policy wonks know, the plaintiffs’ claim that the individual mandate exceeded Congress’ powers under the Commerce Clause succeeded (even if the overall attack on the individual mandate failed on account of Chief Justice John Roberts redefining the mandate penalty as a tax).

Over at Darwin’s Fool, I posted a critique of the Fourth Circuit’s opinion in King v. Burwell. Unlike the D.C. Circuit’s ruling in Halbig v. Burwell, the Fourth Circuit held that the IRS has the authority to issue subsidies in states with federal exchanges, despite the fact that the Patient Protection and Affordable Care Act repeatedly says subsidy recipients must enroll in coverage “through an Exchange established by the State.” I reproduce here my response to a commenter to that post, as his argument parallels those of many others who have been critical of these cases.

My commenter objected that a plain-text reading “must include the entire text of the bill,” which “makes clear that the goal of the bill was to provide health care to all Americans who needed it and could not, at that time get it.” Moreover, “It would be illogical for Congress to establish a national health care system that is based on subsidies and then not include those subsidies in all aspects,” thus “it is entirely reasonable to interpret that one sentence to mean that Congress intended the subsidies for all participants.” My reply:

Sir, I’m afraid you have things exactly backward.

The overall context of the PPACA presents no difficulty for the plaintiffs in King v. Burwell, Halbig v. Burwell, or the other cases challenging subsidies in federal exchanges. The text of the eligibility rules for those subsidies clearly and repeatedly limit eligibility to those who enroll in coverage “through an Exchange established by the State.” There is nothing in the broader context of the statute to suggest that Congress understood the words “established by the State” to have any meaning other than their usual meaning. There isn’t even any statutory language that conflicts with that plain meaning. Jonathan Adler and I addressed (almost) all of these supposed anomalies here.

On the contrary, it is the Obama administration and its supporters for whom both the text and context present difficulties. (We can no longer call them supporters of the PPACA, given how adamantly opposed they are to implementing the law as Congress intended.) The subsidy-eligibility rules are the only place where Congress spoke directly to the question at issue. Those rules flatly contradict the administration’s position. Congress did not throw the phrase “established by the State” around loosely. They referred to exchanges “established by the State” when they meant exchanges established by the states. They referred generically to “an Exchange” when they meant either a state-established or a federal exchange. And they referred to state-established and federally established exchanges separately within a single provision, which shows they saw a difference between the two. Congress also did the exact same thing – withholding subsidies from residents of uncooperative states – in the PPACA’s other massive new entitlement program, the Medicaid expansion.

Today at DarwinsFool.com, I released estimates of the impact of a potential ruling for the plaintiffs in Halbig v. Burwell, one of four cases currently before federal courts claiming that the subsidies and taxes the IRS is implementing in the 36 states with health-insurance Exchanges established by the federal government are illegal. The Patient Protection and Affordable Care Act repeatedly says those taxes and subsidies are authorized only “through an Exchange established by the State.”

Left-leaning groups and media outlets that defend the IRS are attempting to portray a potential ruling for the Halbig plaintiffs as catastrophic, because it would put an end to the subsidies roughly 5 million individuals enrolled in federal Exchanges are currently receiving. As I explain in detail, those commenters ignore three crucial facts. One, a victory for the Halbig plaintiffs would increase no one’s premiums. It would merely stop the IRS from unlawfully shifting the cost of those overly expensive PPACA premiums from enrollees to taxpayers. Two, if federal-Exchange enrollees lose subsidies, it is because the courts will have found those subsidies are, and always were, illegal. And three, if the Halbig plaintiffs prevail, the winners in the 36 states with federal Exchanges would outnumber the losers by more than ten to one.

A Halbig victory would free more than 8.3 million individuals from the PPACA’s individual mandate. That’s how many people in those 36 states the IRS is currently subjecting to the individual-mandate tax without statutory authorization.

In the 36 states with federal Exchanges, a Halbig victory would free 250,000 firms and 57 million employees from the PPACA’s employer mandate. That’s how many people the IRS is unlawfully subjecting to the employer mandate.

The number of winners under a Halbig victory is therefore more than ten times larger than the 5 million people who would lose an illegal subsidy.

Those 5 million people are “losers” not because they were deprived of an illegal subsidy. Regardless of one’s position on the PPACA, we can all agree that courts should put an end to illegal government spending whenever they can. Those people are “losers” because the Obama administration recklessly induced them to purchase overly expensive Exchange coverage with the promise of billions of dollars in subsidies that it has has no authority to offer, and that could disappear with a single court ruling.

I also provide state-level estimates of the number of firms and individuals Halbig would free from these mandates. For example:

A Halbig victory would free nearly 1 million Floridians from the individual mandate, and more than 16,000 firms and 5.1 million Floridians from the employer mandate.

It would free more than 1.5 million Texans from the individual mandate, and free more than 24,000 firms and nearly 7 million Texans from the employer mandate.

A Halbig victory would also enable the 14 states (plus D.C.) that established Exchanges to exempt residents and employers from those mandates by switching to a federal Exchange, as well as create political and economic incentives for states to make the switch.

If the Halbig plaintiffs prevail, the 14 establishing states (plus D.C.) could cumulatively exempt 3.8 million residents from the individual mandate and exempt 123,000 firms and nearly 29 million residents from the employer mandate.

California, for example, could exempt 1.7 million residents from the individual mandate, and exempt 32,000 firms and 9.4 million workers from the employer mandate.

Though those states would lose Exchange subsidies if they switched to a federal Exchange, the much larger number of firms and residents who would benefit could still pressure state officials to make the switch.

These states could also experience economic pressure to switch to a federal Exchange, because the employer mandate (which increases the cost of doing business) will be operative in their states but not in states that opt for a federal Exchange. Establishing states could therefore lose jobs to federal-Exchange states, unless they become federal-Exchange states themselves.

Click here for state-by-state data on the impact (or potential impact) of a Halbig ruling.

At a forum sponsored by Khosla Ventures, Google co-founders Sergey Brin and Larry Page discussed the burden of health care regulations in the United States. When asked, “Can you imagine Google becoming a health company?”, Brin responded:

Health is just so heavily regulated, it’s just a painful business to be in. It’s just not necessarily how I want to spend my time. Even though we do have some health projects, and we’ll be doing that to a certain extent. But I think the regulatory burden in the U.S. is so high that I think it would dissuade a lot of entrepreneurs.

Page agreed:

I am really excited about the possibility of data also to improve health. But I think that’s what Sergey’s saying. It’s so heavily regulated, it’s a difficult area…I do worry, you know, we kind of regulate ourselves out of some really great possibilities.

But surely, the United States does not have government-run health care.

A panel of the U.S. Court of Appeals for the D.C. Circuit, which is often referred to as the second-highest court in the land, is expected to rule any day now on Halbig v. Burwell, a legal challenge that “may actually crush,” “kill,” and “wreck” the Patient Protection and Affordable Care Act, a.k.a. Obamacare.

The tax-law journal Tax Notes has chosen the law-journal article that got Halbig and similar cases rolling – Jonathan H. Adler and Michael F. Cannon, Taxation Without Representation: The Illegal IRS Rule to Expand Tax Credits Under the PPACA, Health Matrix: Journal of Law-Medicine 23, No. 1 (2013): 119-195 – as one of “the 10 law most noteworthy law review articles on employee benefits and executive compensation issues published in 2013 that a broad audience of employee benefits professionals would find relevant and worthy of attention.” Tax Notescalls the Adler-Cannon article “innovative and thought provoking” and one that “practitioners should have read” in 2013.

To read the Adler-Cannon Health Matrix article, click here. For more on the Halbig cases, click here.

Hobby Lobby is a much simpler and less important case than it’s been made out to be, for reasons the Court clearly spelled out today. Obamacare’s contraceptive mandate had to fall under the Religious Freedom Restoration Act (without even getting to the First Amendment) because it didn’t show – couldn’t show – that there’s no other way of achieving its goal without violating religious beliefs. Moreover, the fact that a for-profit corporation is asserting the statute’s protections is of no moment because neither the corporate form nor the profit motive undermines RFRA’s solicitude for the rights of humans – including owners, officers, and shareholders. In short, the mandate fell because it was a rights-busting government compulsion that lacked sufficient justification. Nobody has been denied access to contraceptives and there’s now more freedom for all Americans to live their lives how they want, without checking their freedom at the office door.

For more on how the “corporate rights” issue in the case was really a misnomer – because the free exercise of individual humans is at issue regardless of how you style the legalese – see Cato’s amicus brief.